BA 208 Chapter 7 power point

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10 e
Chapter 7
Organizing and
Authority
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Learning Objectives
• Describe organization charts
• Identify basic ways in which organizations are structured
• Discuss the value of job descriptions
• Distinguish between line and staff authority and between
centralized and decentralized authority
• Compare and contrast authority, power, responsibility, and
accountability
• Identify the steps in the process of organizing
• Describe four principles of organizing
• Discuss why and how supervisors delegate
• Identify causes of reluctance to delegate

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Organizing
Organizing: Management function of setting up the group,
allocating resources, and assigning work to achieve goals
Organization charts
• Use boxes to represent the various positions or departments in an
organization
• Lines connecting the boxes indicate who reports to whom
• Understanding organization charts enables supervisors to figure out
where they fit in the organization and where opportunities might lie
for future promotions

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Figure 7.1: Organization Chart: An
International Company
Jump to Figure 7.1: Organization Chart: An International Company, Appendix

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Departmentalization
Setting up departments in an organization
• Department: Unique group of resources that management has
assigned to carry out a particular task
• Traditional categorization of organizational structures
• Functional structure
• Product structure
• Geographic structure
• Customer structure

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Organizational Structures, 1
Functional structure
• Groups personnel and other resources according to the types of
work they carry out
• Well-suited to centralized decision-making and efficiency through
economies of scale and specialization
• Not well-suited for dynamic environments where decisions must be
made quickly and products or services customized
Product structure
• Work and resources are assigned to departments responsible for
activities related to producing and delivering a particular good or
service

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Organizational Structures, 2
Geographic structure
• Departmentalizes the organization according to the location of the
customers served or the goods or services produced
Customer structure
• Departmentalizes the organization according to the type of
customer served
Combinations
• Organizations often combine the basic forms of structures

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Organizational Structures, 3
Organic structure
• Boundaries between jobs continually shift, and people pitch in
wherever their contributions are needed
Network organization
• Maintains flexibility by staying small and contracting with other
individuals and organizations as needed to complete projects
Learning organization
• Does well in creating, acquiring, and transferring knowledge and in
modifying behavior to reflect new knowledge

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Job Descriptions
Allow those within the various organizational departments and
positions to know exactly what are an individual’s responsibilities
Include:
• Job title and objective
• Summary of the general nature and level of the job
• Description of the broad function and scope of the position
• List of duties or tasks performed critical to success
• Key functional and relational responsibilities in order of significance
• Description of the relationships and roles within the company,
including supervisory positions, subordinating roles, and other
working relationships

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Authority
Right to perform a task or give orders to someone else
• Line authority
• Right to carry out tasks and give orders related to the organization’s
primary purpose
• Staff authority
• Right to advise or assist those with line authority
• Functional authority
• Right given by higher management to specific staff personnel to give
orders concerning an area in which the staff personnel have expertise

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Centralized and Decentralized Authority
Centralized: Organizations that share relatively little authority
Decentralized: Organizations that share a lot of authority
No organization is completely centralized or decentralized
• Organizations fall along a range of possibilities from one extreme to
another

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Power, Responsibility, and Accountability
• Power: Ability, as opposed to the right, to get others to act in
a certain way
• Responsibility: Obligation to perform assigned activities
• Accountability: Acceptance of consequences in relation to
responsibilities met

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Figure 7.4: The Process of Organizing
Jump to Figure 7.2: The Process of Organizing, Appendix

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Principles of Organizing
• Parity principle: Personnel who are given responsibility must
also be given enough authority to carry out that responsibility
• Unity of command: Each employee should have only one
supervisor
• Chain of command: Flow of authority in an organization from
one level of management to the next
• Span of control: Number of people a manager supervises

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Figure 7.5: Recommended Spans of Control
Source: Based on “Span of Control,” The Economist, November 9, 2009, http://www.economist.com.
Jump to Recommended Spans of Control, Appendix

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Work Situation Factors That Help Determine the Span
of Control
• Similarity of functions
• Geographic closeness
• Complexity and change
• Coordination
• Planning
• Availability of staff support
• Performance standards

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Delegating
Giving another person the authority and responsibility to carry
out a task
Benefits
• Supervisors’ performances are evaluated according to the
achievements of the whole department
• Delegating is an important tool for time management as it allows
more time for the supervisor to do what only he or she can
• Delegation of work gives employees a chance to develop their skills
and their value to the organization

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Empowerment
• Delegation of broad decision-making authority and
responsibility
• Based on the expectation that:
• Employees will provide more insight and expertise than
managers can provide alone
• Participation in decision making will make employees more
committed to doing their best

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Figure 7.6: The Process of Delegating
Jump to Figure 7.6: The Process of Delegating, Appendix

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Deciding What Work to Delegate
Delegate tasks that an employee knows how to do better than a
supervisor
Delegate simple tasks that employees clearly can handle
Delegate tasks that one finds most boring
Do not delegate:
• Tasks related to personnel matters
• Activities assigned specifically to a supervisor

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Assigning the Work
Supervisors consider who is available and then determine whom
to assign
• Decision is based on who can do the job best
• Supervisors may make assignments to provide training and
development for employees who have shown potential
Supervisors should:
• Weigh the personalities involved, safety considerations, and
company policies or union rules
• Set task priorities
• Tell the designated employees what they are supposed to do

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Obligation, Authority, and Follow Up
Creating an obligation
• Supervisors should ensure that an employee accepts responsibility
for carrying out the delegated task because both the supervisor and
the employee are responsible for the completion of the task
Granting authority
• Along with responsibility, supervisors must give employees the
authority they need to carry out their jobs
Follow Up
• Supervisors should give employees freedom to act creatively and
independently and ensure that they are available for guidance
• Progress of the work should be checked periodically

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Reluctance to Delegate
Some supervisors believe that:
• If they do not monitor employees closely, departmental
performance will suffer
• They can do a better job than their employees
Observing an employee making mistakes can be difficult for
supervisors if they will look bad for allowing the mistakes to
occur
Supervisors must overcome discomfort or fear because the
organization needs supervisors who supervise

24. APPENDICES

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Figure 7.1: Organization Chart: An International Company,
Appendix
A rectangular box labeled chairman and chief executive officer is placed at the top. A line
connects this box to two boxes that are labeled corporate staff: Capital Corporation and president
and chief operating officer.
The box labeled president and chief operating officer is connected to two boxes that are labeled
North American operations and international operations.
The box labeled North American operations is connected to three other boxes, which are labeled
soft drinks, food, and vitamins.
The box labeled soft drinks is connected to a box labeled Sure Fizz U S A.
The box labeled food is connected to six boxes that are labeled Lunch Deluxe Foods, Good Foods
U S A, Housebrand Good Foods Frozen Products, Housebrand U S A, Housebrand Good Foods
Commercial Products, and Housebrand Good Foods Canada.
The box labeled vitamins is connected to a box labeled Good Health Company.
The box labeled international operations is connected to a box labeled soft drinks and food,
which is connected to two boxes that are labeled Sure Fizz International and Household Good
Foods International.
Jump back to Figure 7.1: Organization Chart: An International Company

26. © McGraw-Hill Education
Figure 7.4: The Process of Organizing, Appendix
The first box reads define the objective. An arrow from this box
points to the second box, which reads determine the needed
resources. An arrow from the second box points to the third box,
which reads group activities and assign duties.
Jump back to Figure 7.2: The Process of Organizing

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Figure 7.5: Recommended Spans of Control, appendix
The first box is labeled consensus before 1960. It shows that a
manager can effectively supervise six people. The second box is
labeled consensus after 1960. It shows that a manager can
effectively supervise fifteen people.
Jump back to Figure 7.5: Recommended Spans of Control

28. © McGraw-Hill Education
Figure 7.6: The Process of Delegating, Appendix
The first box reads decide what work to delegate. An arrow from
this box points to the second box, which reads assign the work.
An arrow from the second box points to the third box, which
reads create an obligation. An arrow from the third box points to
the fourth box, which reads grant authority. An arrow from the
fourth box points to the fifth box, which reads follow up.
Jump back to Figure 7.6: The Process of Delegating